This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

4 Reasons Not to Buy Stocks in 2013

Since then, international markets have cooled off.

The drama in Cyprus doesn't help things much. With wealthy EU depositors now fearful that the haircut forced on Cypriot depositors could become the new prototype for similar crises (and there will be similar crises in the EU), banks will have to contend with a jumpy base of savers. To read a blog like Zero Hedge, the situation in Cyprus could spark the beginning of the end for the EU in 2013. Then again, to read Zero Hedge, every news headline could spark the beginning of the end for something.

While many international markets have cooled off, it looks more like a correction in most cases rather than a change in trend. Bear in mind that many overseas stock markets have been rallying extremely hard for the last year without much of a correction or consolidation along the way. That's not sustainable -- but it also doesn't mean that overseas stocks are going to zero.

More important, a handful of the strongest names are still looking very bullish indeed: the Japanese Nikkei 225 and South Korea's KOSPI are just two examples.

4. We're Near a Historic Top for Stocks

Finally, there's one of the most guttural arguments not to buy stocks in 2013: We're near a market top.

While the Dow Jones Industrial Average pushed through to new highs this year, the S&P hasn't yet and the Nasdaq Composite is still far from its high water mark. So why should stocks continue to rally when they're approaching a level where they've failed before?

Make no mistake, of course stocks could top out here. But looking back at the broad market over the last few decades, stocks have been trending higher consistently. By definition, that means that stocks were bumping their heads against all-time highs more often than not, and then pushing through them. Naturally, price resistance is a concern at an all-time high for stocks, but the technicals behind recent price action have been extremely orderly. That makes the likelihood of new highs in the S&P much higher than if the index had been on the heels of some unsustainable rally.

3 of 4

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,172.68 -107.06 -0.62%
S&P 500 1,994.29 -16.11 -0.80%
NASDAQ 4,527.6890 -52.10 -1.14%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs